U.S. Silica’s Sands Cracking Open Oil and Gas Market
Tue, Feb 26 2013 00:00:00 E00_WEB
By Kevin Harlin, Investor’s Business Daily
Posted 02/26/2013 02:12 PM ET
Strong demand from oil and gas drillers in U.S. shale fields boosted fourth-quarter profits for fracking sands supplier U.S. Silica Holdings (SLCA).
It also guided current first-quarter results comfortably over analyst forecasts. Shares surged 20% intraday on the stock market today.
“Looking ahead, we have strategically positioned ourselves well in all of our major markets to provide a strong platform for sustained growth and increased profitability in 2013,” CEO Bryan Shinn said in a statement.
The company, which went public in February, posted fourth-quarter earnings per share of 41 cents. Analysts surveyed by Thomson Reuters were expecting earnings per share of 32 cents. The company said revenue increased 42% to $118.8 million vs. analyst forecasts for $108.7 million. It guided for first-quarter revenue of $115 million to $123 million. Analysts were expecting $114.82 million.
U.S. Silica grinds and processes silica for industrial and specialty uses.
Total sales volume increased by 10% from a year ago to 1.8 million tons.
Its largest customers are the oil and gas drillers, who mix the sands with the fluids they pump into the ground to fracture shale rock and prop open the cracks, allowing oil and gas to flow.
Oil and gas sector revenue climbed 87.6% from a year ago, to $70.9 million.
U.S. Silica is the top-ranked stock in IBD’s Chemicals-Specialty group, with a near-best 97 Composite Rating.
H.B. Fuller (FUL), with a 96 Composite Rating, was second in the group. It topped analysts’ fourth-quarter expectations last month.Shares were up nearly 1% intraday Tuesday.
W.R. Grace (GRA), with a Composite Rating of 86, also beat views in its earnings earlier this month.